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Cash offers skyrocket as much as 700% for U.S. landowners resisting Keystone

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Alexander Panetta, The Canadian Press
Published Sunday, January 26, 2014 2:45PM EST
Last Updated Sunday, January 26, 2014 10:59PM EST

PAGE, Neb. -- Cash offers have been skyrocketing, as much as seven-fold, for holdout Nebraska landowners who are willing to sign quickly to allow the Keystone XL pipeline onto their property.

The landowners say they've received written offers from pipeline builder TransCanada Corp. in the last few weeks offering exponentially more money than initially promised, on the condition that they sign soon.

Those offers are pouring in at a pivotal moment for the Canada-U.S. pipeline, whose proponents hope to start building this year.

One family says it was initially guaranteed US$8,900 in 2012 to allow the pipeline through its farm. Now, according to an offer sheet dated Jan. 13, 2014, the figure has surged to $61,977.84.

But, just like that old marketing slogan says, the offer's good for a limited time only. Included in the price tag is a $27,000 signing bonus that shrinks the longer they wait -- after 30 days it falls to $18,000, then after 45 days it disappears entirely.

"They're sick of us and they want to get it done," said Jeanne Crumly, a retired high-school teacher whose husband's family has farmed for generations on that land near O'Neill, Neb.

"They want it to be intimidating. This is more a psychological document than a legal document."

This is a crucial moment in the struggle over the project, designed to increase Canadian oil-pipeline capacity in the U.S. by about one-quarter.

For starters, the Obama administration could decide in the coming weeks whether to allow the pipeline to cross the border from Alberta. At the same time, holdout landowners are suing the Nebraska state government over a bill that would force them to allow Keystone XL on their land.

If the landowners all signed deals with TransCanada in the coming weeks and months, however, that legal fight could be mooted, allowing construction to get underway in the event of a thumbs-up from the White House.

Among all states along the proposed route, Nebraska stands alone. Landowners have signed in every other state but, in Nebraska, nearly one-third are still fighting.

So will the Crumlys sign? Not if they can help it. Like more than 100 other holdouts, they're working with a law firm and have no plans to settle unless they absolutely have to, upon approval of the project by the U.S. government.

They're aware that their bargaining leverage could then subsequently drop -- along with the value of the offer, potentially -- but they'd rather fight as long as they can.

"It literally feels like you're selling your soul to the devil," said Jeanne's husband, Ron Crumly, who is the third generation to farm the property, and who wants to pass it on to his children and grandchildren.

"It's like a test of my constitution."

The Crumlys say they'd even turn down $1 million if it meant keeping the pipeline off the 1,820-hectare parcel of land where they raise soybeans, corn, potatoes, and a 300-head herd of cattle. They're concerned that in the event of a leak on their remote property, help would arrive too slowly, while the spill would quickly seep through the region's porous, sandy soil and infect the groundwater.

Opponents have been keeping tabs on each known incident involving a pipeline -- including the explosion over the weekend of a TransCanada natural-gas link near Winnipeg.

Jeanne chokes back tears while describing how hard her husband has worked to restore the family land.

Ron's eyes well up, too.

Another farmer, Joe Moller, said the offers progressively escalated -- from just $10 to $11,000 -- for use of his mostly recreational land south of Lincoln, Neb., before the route was moved away from his property.

TransCanada says the landowners need not worry about spills from the pipe, which is just under a metre wide.

Spokesman Shawn Howard says the company's stations are equipped with state-of-the-art detection systems, and its specially trained crews would shut down the oil flow as soon as a few spilled barrels were spotted. As for the drastic surge in the offer amount, he says that's just natural because land values have gone up.

Bill Tielke seconds the point about increased land values.

He's not only a councillor for Holt county, but is also among the more than two-thirds of Nebraska landowners on the route who have signed a deal with TransCanada. He says irrigated land that was going for $2,500 an acre five years ago is now being sold for $10,000.

"Why do they have to increase their deal? Land has gone up four times," Tielke said in an interview.

He declined to discuss his own settlement amount, but said he'd been assured that if offers kept increasing landowners who signed earlier would have their sum sweetened, too.

Tielke said he was able to do his homework long before the planned route wound up on his property.

That's because he also happens to work as a crop adjuster. That job allowed him to speak with about a half-dozen landowners who live on the route of the state's older, existing Keystone pipeline. He said he was reassured by what he'd heard. Still, when the time came to discuss his own deal with TransCanada, he spent a few months negotiating the conditions before signing.

"Do I want (the pipe) to leak? Absolutely not. Can it leak? Possibly," Tielke said.

"But I'm comfortable. I've researched it enough that I could hardly research it any more."

He ascribes the lingering opposition to fear of the unknown. No infrastructure would ever have gotten built, he said, if previous generations of landowners could simply have refused access to railroads, highways and pipelines.

Jim Tarnick, on the other hand, lost faith in the company from the start.

He was initially offered $38,000 in early 2012 to allow the pipeline across two tracts of his land, which were farmed by his late father.

The terms sweetened considerably last month: the offer-per-acre rose roughly four-fold, to $77,000 for the use of just one tract, half the size of the original proposal.

Tarnick said he spotted a phrase in Latin on the initial draft offer. He asked a lawyer about it and was told it meant he'd be liable in the case of an act of God.

Tarnick threw the document in the trash.

There are other things about the project that bother him.

Tarnick, a university grad in diversified agriculture, says the high-alkali soil in his region is highly corrosive. It will eat away a fence-post within a few years, and he's worried it might damage even an industrially treated pipeline. The company insists its pipelines are properly coated and will withstand corrosion.

And, finally, opponents say the company was just plain disrespectful.

They describe being ridiculed for expressing concerns about safety. To make matters worse, they say, the company tried to low ball them. They point to letters dating back a few years that described the project as a fait accompli, telling landowners they had no choice but to sign a so-called "final offer."

A few years later, as it turns out, there's a lot more cash on the table.

"I'd tell them to go to hell," Tarnick says. "It's just not worth our water."

Clearly, not all Nebraskans feel that way.

Tarnick's next-door neighbour has signed a deal. So has Ron Crumly's own brother.

Some people have told friends they're signing while keeping their fingers crossed that the project never gets approved. That way, they say, they can hope to pocket an early bonus without ever taking on a single yard of pipeline.

Still, people on both sides of the issue say the project has strained old relationships.

"That's been the hard part," Tielke said of the reaction from peers after he signed a deal for his land, which has been in the family for three generations. "You get labelled almost as a traitor because you sign an easement...

"People want to tell you how disappointed they are."

Have there been arguments amongst neighbours?

"A few," Tarnick says. But he adds that folks in the region have tried to avoid making it too bitterly personal.

"If somebody wants to take their money, they should take their money. This is America."

Photos

Ron and Jeanne Crumly, seen on their property in Page, Neb., say they have no intention of signing to allow the Keystone XL pipeline on their land - whatever they're offered. (Alex Panetta / THE CANADIAN PRESS)

Jim Tarnick, seen on his property in Fullerton, Neb., says he has no intention of signing to allow the Keystone XL pipeline on his land. (Alex Panetta / THE CANADIAN PRESS)